ETF Tracker Newsletter For August 13, 2021

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

GRINDING OUT ANOTHER WIN

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

It was a struggle, but the major indexes managed to close in the green again and finish another week with a win. Early this morning, the Dow and S&P 500 made new all-time highs but skidded lower throughout the session.

Amazingly, the S&P 500 has continued to inch into record territory, despite mixed economic data and confusion caused by various Fed speakers on the topic of tapering, or more specifically as to when it is supposed to begin.  

The University of Michigan’s consumer sentiment index collapsed with a weak reading of 70.2, which is the worst since September 2011. One strategist interpreted this number as reflecting not only higher prices but also increased concerns about the delta variant.

Yesterday’s jobless claims came in at 375k, not only in line with expectations but also on a declining trend for the third straight week. But the Producer Price Index (PPI) ratcheted higher by 0.9% last month vs. a forecast of 0.5%. And that is without the volatile food and energy components. Ouch!

In terms of performance “value” outperformed “growth” this week, although the spread has narrowed over the past two day, as Bloomberg shows in this chart.

Bond yields ran into overhead resistance, which is the 1.36% level for the 10-year, from which they retreated today. The US Dollar followed suit and plummeted on worsening consumer confidence. This combination of slipping yields and a sliding dollar proved to be precious for Gold, with its EFT GLD surging a well deserved +1.43% on the day, bringing the $1,800 level in reach again.

With consumer confidence plunging to 10-year lows, as ZeroHedge reported, what on earth could be driving stock prices relentlessly higher?

I am glad you asked. The answer is simple and clearly expressed in this chart.

Read More

Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 08/12/2021

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, August 12, 2021

Methodology/Use of this StatSheet:

1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.

2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use an 8% trailing stop loss on all positions in these categories to control downside risk.

3. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 8%-10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.     

1. DOMESTIC EQUITY ETFs: BUY — since 07/22/2020

Click on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) has now rallied above its long-term trend line (red) by +11.37% and remains in “BUY” mode as posted.

Read More

Gingerly Advancing

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Despite worsening inflation numbers, the markets jumped right after the opening bell, with only the Nasdaq losing momentum during the session, while the Dow and S&P 500 remained solidly in the green.

July’s CPI showed that prices surged 5.4% YoY, which was a tad higher than expectations of 5.3%. MoM the CPI increased at a rate of 0.5% in July. Sure, this could have supported a sell-off, but traders looked at it from a different perspective.

Because, when excluding the energy and food prices, the rise was only 0.3% last month, which was below the expected 0.4% increase. That’s how you turn a negative into a positive giving markets a reason to rally. After all, who uses food and energy anyway?

If you can believe it, this inflation reading, according to the mood on Wall Street, supports the Fed’s belief that these inflationary pressures are still “transitory” and a sign that the economy is indeed recovering from the pandemic. Go figure…

The battle between “growth” and “value” continued unabated, as Small Caps (VBK) took an early hit but managed to crawl back to their breakeven point, while “value” (RPV) ran with the bulls all day to score a 1.30% gain.

Bond yields stair stepped lower, with the 10-year bouncing off its 1.3% level to end around 1.34%, while the US Dollar index swan dived back to its unchanged level for the week. Despite that mixed showing, Gold surged higher with GLD adding 1.38% and again pursuing its $1,800 level.

Tomorrow, we will find out if the Producer Price Index (PPI) will have a surprise in store for the markets.

Read More

Battling The Unchanged Line

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

Despite the Dow and S&P 500 climbing into record territory right after the opening, it was only the Dow that maintained its bullish momentum into the close. The S&P 500 floundered and battled with its flatline but managed to close a tad above it, while the Nasdaq stumbled in the red throughout the session.

Supporting the Dow was the Senate’s passage of the $1 trillion infrastructure package, which traders assume to assist those stocks benefiting from economic growth. At least that’s the theory, but as I have pointed out before, the economy needs a boost, as peak growth has decelerated.

Overall, markets were mixed with Small Caps (VBK) taking a hit of -0.78%, while “value,” as represented by RPV, added a solid +1.32%. That performance was outdone by the Commodities Index (DBC) with +1.81%, as inflation persists and creeps through that sector.

Bond yields continued their charge higher with the 10-year reaching almost 1.35%, which is a massive rebound from the lows of 1.12% just a few days ago. Given higher yields, it’s no surprise that the US Dollar ramped higher and has now reached a point that is close to its March highs.

Gold managed to break even and is trying to find some base from which to launch a new attack at its recently lost $1,800 level.

Leave it up to ZeroHedge to come up with another historical trend analysis, this time comparing the current S&P 500 performance with that of 1987:

I for one can’t wait to see if history repeats itself.

Read More

Flopping And Chopping

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The growth meme was the talk of the day on Wall Street, as concerns mounted again that not all is well in the world of economics.

Things started on a shaky foundation in the futures markets, with all major indexes in the red, while gold got hammered almost 3%, as one entity unloaded $4 billion in gold contracts. This was obviously an act of manipulation because an investor concerned with not moving markets adversely would liquidate a holding slowly and meticulously and not dump it all at once.

As the chart above shows, a mid-day rebound pushed the S&P 500 back above its flatline, but it slipped into the close with a minor loss, with the Dow following suit. The Nasdaq showed more bullishness and eked out a small gain.

The US Dollar continued its upswing from last Friday but wavered during this session yet gained modestly in the end. Not helping gold nor stocks was the 10-year bond yield which, after an early pullback, found some momentum and reclaimed its 1.3% level.  

Small Caps (VBK) slipped moderately while Value (RPV) gained a tad, as financials (XLF) were favored (+0.26%) due to rising bond yields.

Looking at the big picture, the markets went nowhere with some gainers offsetting some losers.   

Read More

ETFs On The Cutline – Updated Through 08/06/2021

Ulli ETFs on the Cutline Contact

Below, please find the latest High-Volume ETF Cutline report, which shows how far above or below their respective long-term trend lines (39-week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 312 High Volume ETFs, defined as those with an average daily volume of more than $5 million, of which currently 250 (last week 260) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line (%M/A) from those that have dropped below it.

Take a look:                                                                   

The HV ETF Master Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms. If you missed the original post about the Cutline approach, you can read it here.